Paying with a card instead of using cash can give consumers some valuable protection if the company that they purchase from doesn’t deliver the item promised, or goes bust. You may be able to claim a refund for the items that you don’t get from the credit card company. Additionally, you might be able to get some protection when paying for items via debit card under certain schemes.
Rights and Buying by Credit Card
If you purchase something with a credit card, such as a vacation or goods that cost up to £30,000, you will be covered by the 75th section of the consumer credit act. This act determines that credit card companies have liability alongside the seller if there’s a problem with anything you bought. The problems that are covered might include issues where the company haven’t supplied the goods bought, or failed to provide goods that were up to standard. Additionally, you can claim if the company misrepresented the goods they were selling.
In order for any person to qualify for protection from a credit company, they will need to spend a minimum of £100, or a maximum of £30,000. The minimum amount will apply to each set of items, or item that you purchase, rather than the complete bill. For instance, if you purchased a jacket and dress that weren’t sold together, and each was worth less than £100, you wouldn’t be eligible for section 75 coverage.
Another example might include purchasing event tickets. While family tickets would count as a single item, multiple tickets for a family wouldn’t count. However, you may be able to make claims against your credit card company using a voluntary “chargeback” scheme, which we will address in a moment.
The Rules for Second Cardholders
A credit card doesn’t necessarily have to be part of a “joint” account, for another person to use it. If you’re a second cardholder, perhaps because your wife, husband, or partner is the main holder of a credit card account, you may also be able to access some legal protection from your card provider. It’s a bit of a grey area here, so it’s worthwhile to check with the card issuer at the outset of your next big endeavor, but in broad terms you will often be covered in certain circumstances.
For instance, second cardholders are often covered if:
They purchased something that was for both people who use the card, or for the main cardholders specifically, such as a birthday present or a family holiday
The claim for assistance is made by the primary card holder. If it’s the main card holder that applies for assistance, they will be covered by all protection offered under section 75.
How to Make Claims When You Paid by Card
If you purchased something using a credit card and you encounter a problem with the purchase in question, you should make sure that your first step is to contact the company that you bought the item from. However, if you can’t get a reply, or a refund from that company, you will be able to make a claim against the credit card company. At this stage, you should:
Contact the credit company stating what you purchased, when and where you bought it and how much was paid. Include any copies of receipts you have.
Make sure you tell your credit card company that you attempted to contact the company you bought the goods from, and that you didn’t have any positive response.
Explain what you would like your credit card company to do about the situation. Usually, this will include refunding the purchase into your credit card account. Here, you can state that you’re making a claim under the 75th section of the consumer credit act.
Make sure you keep a copy of the letter that you send.
A Quick Guide on Chargeback
One important thing to remember is that debit cards aren’t typically covered by section 75 of the credit act for consumers, though there is a similar scheme in place called “chargeback”. This scheme can also be used to make claims if you purchase something with your credit card that cost less than £100. Chargeback isn’t legal protection, but is instead a voluntary agreement signed by MasterCard, visa, maestro and American Express.
This scheme allows you to claim for a refund from your debit provider if your purchase is faulty, or doesn’t arrive. The card company attempts to claim the money back from the company that you paid to, reversing the transaction. There’s no minimum spend required for coverage through chargeback, but time limits are in place to making a claim. These time limits can be between 45 and 120 days from making the purchase. The type of card will go a long way towards deciding what’s possible for your chargeback claims.
It’s worth noting that chargeback claims can often take some time to process, because your card company will need to get the money refunded before it can pass the cash back to you.